Cumbrians hoping to buy their first home are being given a helping hand with news that The Cumberland is reintroducing its 95 per cent mortgages.
It will be a welcome boost to the many homebuyers who find saving up for a deposit to be the slowest and often hardest part of the process.
The Cumberland’s move comes ahead of a scheme heralded by chancellor Rishi Sunak in his budget, which will see the Government support first time buyers with a mortgage guarantee scheme.
However, the building society says it will not be using the Government’s scheme when it returns to the 95 per cent mortgage market this week.
Jack Green, area manager at The Cumberland, said: “We share the Government’s ambition to help more people buy their first home – turning generation rent to generation buy, as the chancellor described it.
“Unfortunately, Covid-19 saw lenders withdraw their 95% products as it wasn’t clear what impact the crisis would have on the economy and the housing market. We’re pleased to be able to reintroduce these low deposit mortgages ahead of most lenders, meaning we can help even more first time buyers achieve their goal.”
The 95 per cent loan-to-value market in mortgages almost vanished in 2020 amid fears about falling house prices, negative equity and the risk of defaults in the pandemic.
Mr Green added that saving up for a deposit was a significant issue for a number of first time buyers who could nevertheless easily afford mortgage payments.
“For a lot of buyers it is not so much about having the income, it’s about being able to save for the deposit. It is particularly an issue for younger people who are renting because it is difficult to save at the same time as paying rent, which can be as much as a mortgage,” he said.
“The Cumbrian housing market has been buoyant over the last year. The supply of new houses is good and first time buyer can still pick up a great home for £80-90,000, but we have seen an increase in people buying larger first homes too as people look for more space.
Aileen Robertson, product manager at The Cumberland, is hoping the low deposit mortgages will increase confidence among first-time buyers.
“This new range of mortgages includes a £1,000 cashback product. We hope homebuyers will see them as a strong sign that we’re keen to help as many people as possible get on the housing ladder,” she said.